What Is A Delaware Manufactured Home Loan?
With housing prices being above several hundred thousand dollars, it can seem like a huge decision to buy a home. It’s a large investment – there’s a chance that it will take years to save up enough to afford a traditional home in Delaware. Manufactured homes are more affordable (typically) than homes that were built on site and are therefore more financially accessible. They also come in a variety of styles and options, giving homeowners a more traditional home feel for less. The John Thomas Team can help you navigate the Delaware Manufactured Home Loan – give us a call at 302.703.0727 or Apply Online to get started.
New home shipments of manufactured homes have been increasing since 2011. Nearly 18 million Americans live in some sort of manufactured dwelling. Manufactured homes are built on chassis – think of a car and steel base with wheels and axles. All Manufactured homes today are built on HUD code. Once they reach a permanent location, the wheels, hitch, and axles come off. At that point the site is prepped, you’re connected to utilities, your home is removed from the chassis and is put on permanent foundation.
What is the Difference Between Mobile, Manufactured, and Modular Homes?
When discussing Delaware Manufactured Home Loans, it’s important to understand the three types. What many people think of as a “mobile home” is most likely a “manufactured home”. There are major differences in the home categories:
- Mobile homes are factory-built homes made before June 15, 1976. Since they were built before safety regulations were put in place by HUD, they aren’t usually approved for loans.
- Manufactured homes are factory-built homes that are built on a chassis. These homes are subject to the National Manufactured Housing Construction and Safety Standards Act of 1974 – they are required to meet safety standards set by the U.S. Department of Housing and Urban Development (HUD)that were put in place after June 15, 1976.
- Modular homes are similar to Manufactured homes but built to a different code (not HUD). They are never put on a chassis, are factory-built homes that are assembled on-site, and are typically permanently installed on a concrete foundation. They are basically a dwelling that is built in a factory, then joined together at the site on a permanent foundation in accordance with all state and local laws.
- Built to IRC code
- Built in sections and put together at property site
- Tend to hold value and appreciate more than manufactured or mobile homes, so it’s easier to get loans for modular homes
A common misconception is that manufactured homes are in certain communities. Most buyers go out and buy land and place the home on that land. This makes Manufactured Homes a quite affordable option. Products like Fannie Mae Home Ready and Freddie Mac’s Home Possible have more flexible guidelines and reduced MI.
Very nice areas have manufactured homes – they are not always trailers.
What is Considered a Qualified Manufactured Home?
There are certain qualifications involved with the Delaware Manufactured Home Loan:
- One Unit Only
- Must be constructed after 6/15/76 (when HUD guidelines came in place for constructions of manufactured homes)
- Must have been attached to a permanent foundation in accordance with manufacturer’s requirements
- Must be in compliance with state, local, and federal codes
- Must be permanently connected to utilities, a septic tank or sewer system
- Trucked in Water or Cistern Water is not acceptable
- Must be classified as Real Estate prior to the closing
What mortgage loan options are available to purchase a Delaware Manufacture home or a Delaware Mobile Home?
Delaware Manufactured Home Loans can be used with several government-backed loan programs, such as FHA, USDA and VA. Below is a matrix showing the maximum loan to value (LTV) for each loan type when apply for a Manufactured Home Loan.
Below are the Guidelines for Manufactured Homes by Agency Guidelines per Loan Type:
What are the Legal Requirements for Delaware Manufactured Home Loans?
Your Manufactured home must have the HUD label and data plate evidence that proves the manufactured home was built to HUD code after the 1976 date. An appraisers will always take a picture of the HUD label and the data plate.
The HUD label is a metal plate affixed to the exterior of the home and the data plate is a paper label that is mounted inside the home that includes info such as:
- Manufacturer’s Name
- Year the Manufactured home was manufactured
- Serial Number and Model
- Wind and roof load zones
- Heating and Cooling Data
- HU Construction Zone
This ensures the home has the right specifications for the region.
Per 1976 HUD regulation, the HUD Data Plate form is to be affixed inside the home on or near the main electrical breaker box or other readily visible/accessible location and is printed on paper or foil stock 8 1/2″ x 11″ to 8 1/2″ x 14″ in size. Some manufactures will also use this form for modular homes.
A very important requirement to note: since manufactured homes are built on a chassis, manufactured homes are considered vehicles until closing. The manufactured home must be legally classified as real property and titled as such prior to the closing of the Delaware Manufactured Home loan.
The title will be reviewed to ensure:
- Vehicle title has been cancelled and is classified as a real property
- Title must clearly show that the home is an improvement to the land and will be treated as real property under applicable state laws
- ALTA Endorsements 7, 7.1, or 7.2 or other endorsement is in place allowing home to be treated as a real property
What Isn’t Allowed With Delaware Manufactured Home Loans?
Certain criteria will render a Manufactured Home ineligible for financing:
- Single wide homes are ineligible for most programs
- Single wide homes are ineligible for most programs
- No investment properties
- No Lease Hold
- Renovation Lending is allowed with FHA manufactured homes only
- Second homes are available with Fannie Mae or Freddie Mac only
- Is not eligible if it’s a property that was moved from it’s original site (was permanently affixed to a foundation and then moved to a new location – it’s fine if it is coming from a dealer)
- No co-ops
- No cistern or trucked in water
Can I use a Down Payment Assistance Program to Purchase a Manufactured Home?
Yes, you can use a Down Payment Assistance Program to purchase a Manufactured Home. The guidelines are more restrictive in some cases. Below are options for DPAs:
Delaware State Housing Authority (DSHA) Down Payment Program requires a minimum of 660 middle credit score for all borrowers and must be a double wide
PRMI Advantage DPA Grant Program – requires a 580 minimum credit score to get a 2% grant toward down payment.
How do I Get Started With the Delaware Manufactured Home Loan?
There is a lot of information to sift through for Delaware Manufactured Home Loans. The John Thomas Team can help you cover all your basis and land the home of your dreams – give us a call at 302.703.0727 or APPLY ONLINE.